Sunday, January 12, 2014

Here's a question for business owners and managers. When was the last time you hugged your HR department?

It occurs to me that the human resource manager, human resource assistants, recruiters or whatever you call the people in your HR department are the unsung heroes of business in 2014. They have to find the right people, train the people, and then retain the people for it as long as possible. With all the talent available these days, that's a very very tall order.

Yes, the government says that the unemployment rate dropped to 6.7% today. Theoretically, that's good news, especially if you ignore the low number of jobs created in December. But it also means that a lot of people have just stopped looking for jobs and left the work force. And that might make the HR department's job a little harder because some of those people could be diamonds in the rough for your company. Perhaps their skill set doesn't exactly line up with what you're looking for, maybe they are over 40 and have had jobs in industries that don't exactly match yours, or maybe they just were honest about how much money they wanted to make when they filled out applications. For whatever reason, they've climbed out of the talent pool and therefore can't be used as human capital.

How important is finding and keeping talent? Klaus Schwab, the founder and executive chairman of the World Economic Forum, opened the 2013 event in Davos by asking "Is talentism the new capitalism?". He talked about the importance of talent and how having the right people can provide a huge competitive advantage for any organization. Everyone has the same computer programs, analytic tools, and syndicated data to work with, but the key to making all those things work right is having the right talent to use them, interpret them, and put them to work for your business. And in most companies, finding that talent falls squarely on the shoulders of the overworked and undervalued human resource department.

Many businesses try to help their HR department with this daunting task by

getting them applicant tracking software so they don't have to spend as much time looking at every application that comes in for every opening no matter how big or small it is. We all know how the software works, whether it's Taleo or Kenexa or another vendor's system. The HR person puts in the parameters they are looking for, adds the keywords, presses the button, and the job is posted for all to see. Then the system scans the applications, looks for the best matches, and puts them in a file. The applicants who don't match the qualifications set by the HR department sometimes get a nice rejection letter but tend to go into another file never to be seen again.

Technology is good, and having been a hiring manager I know that often times most of the people applying for a job simply aren't qualified. That's why applicant tracking software was invented, to weed those people out so that the overworked HR department or recruiter can concentrate on the best people based on their keywords.

But technology has its limits. In an ever-changing world where so many people are trying to reinvent themselves or enter a new industry, applicant tracking systems don't see how the skills these candidates bring to the table can match the keywords for the open positions. It's no one's fault, it's just the way computers work and the applicant tracking system is doing the best job you can based on the information it was given. So is the recruiter really getting the very best person for the job? According to the applicant tracking software, they are. But in reality they may not be. And if that perfect person ends up getting noticed by your competitor, your company has lost the opportunity to acquire a valuable piece of human capital. Sometimes, and probably more often than that, the real best person for the job doesn't make it over one of the benchmarks in the ATS and they get thrown out, leaving the company with no idea that they're missing out on a potential superstar.

To try to show this theory in a real world experiment, I applied for a job that I am well-qualified for yesterday after 5 PM. The application was through an applicant tracking system which was nice enough to send me an automated response saying they had gotten my stuff and would consider me for the job. At a little after 11 PM last night, six hours after making the application and most likely while the HR department at this company was far from their desks, I received a rejection letter for the job I just applied for. I can't prove this, but I can bet that my application was never seen by the retina of any human eye. It didn't match the keywords or got bounced for some other reason and the recruiter or HR director at this company will never know that I applied for the job. They lost the chance to at least investigate the acquisition of good human capital. And if I get a similar job at their competition, they lose the never ending battle of having the best people in their company.

I don't envy the role of a recruiter or HR director in this day and age. Too many tasks, too little time, and not enough help makes the job one of the most challenging in any firm. But companies who don't invest in finding the best human capital and looking beyond the applicant tracking systems are likely missing the opportunity to grow a world-class organization. Not having the human touch in the recruiting process could theoretically make the difference between success and failure for a project or an entire company. Setting one parameter unwisely in the ATS can rob a business of the person they need to move forward without them even knowing it because the HR Director or hiring manager will never see the application.

I worked for a decade at Viacom, and the chairman of the company, Sumner Redstone, was well known for saying that his most valuable assets go down the elevator at the end of the day. He knew that it was the people that worked for him that made his brands great. He also knew it was the people that did the work that generated the profits that he and his stockholders enjoyed. Even the strongest brand has to be powered by human capital.

So I go back to the question I opened this post with. When was the last time you

hugged your HR department? What have you done for them to make their jobs a little easier, a lot more productive, and help contribute more to the acquisition of the very best human capital out there? In 2014, it's about the people working in the companies that will decide success or failure. Think about that when you're looking at your HR budget or when you walk past that department in your company. Those people need a hug, and a whole lot more.

Mercer released a report about the importance of human capital. You can find a link to download the Executive Summary here. If you're in HR, you might want to print it and leave it on your boss's chair.